Public transportation and Economic Growth Policy of the Year Nominee



Economic for Development

10 Ideas for Economic Development
National Director Taylor Jo Isenberg Policy & Program Director Alan Smith Deputy Policy & Program Director Lydia Bowers Field Director Winston Lofton Deputy Field Director Joelle Gamble Chapter Services Coordinator Dante Barry With special thanks to our editors Roosevelt Institute Communications Team Bryce Covert, Tim Price Alumni Editors Jason Gould, Kelly Steffen Lucas Puente, Reese Neader Student Editors Raj Mathur, Wilson Parker




Economic Development


Congratulations to Michael Lemm author of Stimulating Economic Growth in Low-Income CommunitiesThrough Federal Grants for Public Transportation Nominee for Policy of the Year .

its officers or its directors. NY 10022 Copyright (c) 2013 by the Roosevelt Institute. 5th Floor.and must . Marked by this logo.You will see pieces scattered throughout this document that connect directly to the Government By and For Millennial America project. The views and opinions expressed herein are those of the more engaging. and seeks to imagine and then build an ideal version of what our government can . They are focused and specific plans for change that can make government more innovative. the recent initiative from the Campus Network that projects the values of this generation onto the systems of American government. please visit our website www. To learn more about the Government By and For project. these pieces represent the sort of ideas that fit within the structure our Millennial vision for government. The Roosevelt Institute Campus Network A division of the Roosevelt Institute 570 Lexington All rights reserved. and more democratic.rooseveltcampusnetwork. New York. . They do not express the views or opinions of the Roosevelt Institute.

Inside the Issue Revenue-Neutral Carbon Tax: A Model for Decoupling Growth and Carbon Emissions Mike Hathaway and Amanda Purcell Affordable Housing in a Poverty-Stricken Community Kirstie Hostetter Stimulating Economic Growth in Low-Income Communities Through Federal Grants for Public Transportation Michael Lemm Eliminating Online Payday Loans Christina Luo Providing Broadband Internet Access via Arkansas Municipalities Jacob Porter Incentivizing Investments in Our Community Kevin Tian Preventing Foreclosures: Stabilizing the Regional Tax Base and Local Real Estate Markets Through Public Finance Nicholas C. Toth Strengthening and Branding the Maine Lobster Industry John Tranfaglia Deterring the Influence of Money in Politics Through Taxation Adam Watkins Replacing the Employer Health Care Exclusion for a Fairer Healthcare Market Victor Zhao P 8 10 12 14 16 18 20 22 24 26 .

we are still beholden to a political process more focused on scoring partisan points than moving our country forward. and always looking toward the future in the pursuit of progress. our premier journals represent unique ideas from 83 authors at 30 different schools. and platforms that will allow us to realize the vision that was first laid out in dorm rooms across the country eight years ago. Taylor Jo Isenberg National Director Roosevelt Institute | Campus Network . What emerged from that moment of collective reflection was the recognition of our unrealized potential as a movement. The 2013 10 Ideas series represents that ongoing effort to build the infrastructure. we proudly presented the 10 Ideas series as a powerful reminder that this generation is not only willing to build a better future. That original purpose has endured as the Campus Network has grown to over 100 chapters. We are increasingly powerful actors in our public debates. and fought for. collaborating with local partners and stakeholders. but our ideas. communities. and priorities were not represented in our public discourse or electoral system. rigorous engagement. designed. This year. it will take constant renewal and commitment to fresh ideas. It was this realization and subsequent rejection of the status quo that led to the founding of what is now the nation’s largest student policy organization. and lobbying on Capitol Hill. but has already begun. While our members’ student-generated ideas and solutions-oriented action have redefined youth participation in the political process. we put these solutions forward to demonstrate that members of this generation are in it for the long haul as part of an initiative that is always growing. and long-term action to achieve what we know is possible. p Letter from New York City The Roosevelt Institute | Campus Network was established in 2004 in response to the deep and pervasive sense that young people were overlooked in the policymaking process – that we could put boots on the ground and donate what little money we had to support leaders that promoted our progressive values. Yet at a recent gathering. As they go to press. Last year. one of our top leaders noted that the challenges we face in the wake of the 2012 election are similar to the ones that first brought us together. always evolving. This year. supported. but despite the bold ideas and ambitious agendas we’ve envisioned. our members are already translating those ideas into action by initiating petitions. opinions.

Join us in seeing these ideas realized. and our country. and a government that often seems unable or unwilling to address the things that matter most are challenges that require the very best and the very brightest. and community-minded world. This year’s Economic Development journal reveals a common desire to protect the most vulnerable in our society and imagine government as a steward of the common good. Students explore how public goods and institutions. and are waiting for someone else to solve our problems. or affordable housing. increasing inequality. Welcome P We are pleased to share the fifth edition of the Roosevelt Institute | Campus Network’s flagship 10 Ideas series. Yet this journal represents just the tip of the iceberg. are filled with game-changing public policy suggestions that we can and must implement now. and lawmakers. researching. have hindered access and opportunity for low-income Americans. At the same time. Each year. These journals and the 10 Ideas series taken together are a library of ideas that can help us build toward a more equal. Alan Smith Program and Policy Director Roosevelt Institute | Campus Network Lydia Bowers Deputy Program and Policy Director Roosevelt Institute | Campus Network . each idea is a simple solution. we are told that Millennials are checked out. such as transit. and developing public campaigns hidden below the surface. professors. Rising healthcare costs. global climate change. putting forward ideas to change the problems we see in the world around us. these student authors have identified the policies that can make the most difference. We are in desperate need of these ideas. We believe in the power of people working together to solve problems. Working with community members. These journals. have lost interest. Taken on its own. the 10 Ideas journals provide a vision for change that addresses the needs of our neighborhoods. with many hours of organizing. Other authors examine how to put regulatory systems in place for problems ranging from predatory lending to the proliferation of carbon in our atmosphere. Internet access. local nonprofits. making the clear case that we are engaged and active citizens. our cities. These journals are an answer to that narrative. encompassing the best student ideas from our six policy centers. accessible. fundraising.

The experience of British Co• Key Facts lumbia is especially noteworthy due to its • A $20-a-ton carbon tax rising 4 perrevenue neutrality. absolute decoupling is the key to any sustainable future. A carbon tax provides a possible solution to this problem. while consumption in the rest of 5 Canada increased by 1. limiting criticisms of carbon taxation’s economic costs. and absolute decoupling.1 percent in Columbia achieved a 15.3 This would play an important role in decoupling growth from emissions.1 were reduced. Analysis Applying such a revenue-neutral carbon tax would enable the U. They are currentcorporate and personal income tax rates ly at 391 ppm and rising rapidly. 8 . Decoupling comes in two forms: relative decoupling.10 products. Relative decoupling has been the predominant form for the last two decades. British Columbia has economically outperformed the rest of Canada. with relatively fewer emissions per amount of growth. to further decouple its economy and emissions.3 and power generation sectors.1 percent reduction British Columbia while rising in the rest of Canada in the first four years in per capita consumption of petroleum of the tax. emissions must stabilize at 450 ppm (parts per million) by 2050 to avert catastrophic warming. By instituting such a tax.2 This demands greater action from all countries to confront this global problem.1 Unfortunately. According to the scientific consensus. British • Petroleum usage fell 15. emissions are currently at 391 ppm and accelerating globally at an increasing rate. with absolute declines in emissions even as the economy grows. Simultaneously. the United States will be able to increase economic growth and reduce carbon emissions. In the first four years. By correcting the negative externality imposed by CO2 emissions (in that the price of goods and services emitting carbon will have to take into account their “external” social cost).S. Over the past few decades. the United States and the world as a whole have lagged in confronting climate change.3 percent. Massachusetts Institute of Technology (MIT) recently published an analysis based on a tax of $20 per ton of carbon that rises gradually over time.4 Carbon taxes have been implemented in countries such as South Korea and Australia and in Canadian provinces such as British Columbia. however. The reve• Carbon emissions must stabilize at nue was then used in a “tax-shift” whereby 450 ppm by 2050.Revenue-Neutral Carbon Tax: A Model for Decoupling Growth and Carbon Emissions Mike Hathaway and Amanda Purcell. which means that even while economic growth continues. The British Columbians cent a year will result in over $600 enacted a carbon tax on the transportation billion in revenue a year by 2050. carbon emissions are simultaneously reduced. the United States could make significant steps toward reducing its own emissions while providing a model for other countries to follow. College of William and Mary A revenue-neutral carbon tax could play a role in decoupling economic growth from carbon emissions.

These higher prices cause industry to be less competitive and consequently to move abroad. Sebastian.62 percent reduction by 2050) and with the provision of investment tax credits. 2012). Revenue raised from a carbon tax is also less distortionary than payroll events/2012/11/13/understanding-the-economics-of-carbon-taxes/ (accessed December 5. www.aspx (accessed January 22.” AEI .gov.’s Climate Action Plan.” Social Science Research Network.” Department of Climate Change and Energy Efficiency . Emissions Reductions (2007).com/sol3/papers. http://papers.American Enterprise Institute For Public Policy Research. www. Such a policy would also have significant overall economic welfare benefits by 2050.aspx (accessed January 15. 2012).S. 4. By raising the price of carbon emissions. www.” From Poverty to Power.48 percent reduction in 2015 and a 1. 2012). by limiting the encroachment of the carbon tax on extremely energy intensive industries.pdf (accessed December 5. Elliot.oxfamblogs. (accessed December 5.” MIT Joint Program on Global Change.” Union of Concerned Scientists.pdf (accessed December 5. David Weisbach :: Corporate/safety_climate_mgmt_principles. Carbon leakage is the process whereby higher carbon taxation or cap-and–trade schemes raise energy prices. 6. “Making Progress on B. The net result of all this is deindustrialization without meaningful reductions in CO2 at the global level.noaa.sustainableprosperity.Revenue neutrality would be achieved by swapping any increases in revenue with a cut to the payroll tax (a . Gita Khun Jush. Such a tax would also improve” National Oceanographic and Atmospheric Administration.C. and Carbon Leakage by Joshua Elliott. “Carbon Tax Revenue and the Budget Deficit: A Win-Win-Win Solution?. Green. MIT found that such a policy limited growth in carbon emissions and made the tax code more progressive. emissions will rise to untenable levels.” Sustainable (accessed December 5.ssrn.cfm?abstract_id=2072696 (accessed January 18. 10.html (accessed December 5. 2012). 2. the provision of tax credits would lead to a boom in investment spending. ftp://ftp.env. Joshua. carbon taxation is one of the few issues that has broad levels of support on both sides of the aisle. gov. and John Reilly. globalchange. Weisbach. Decoupling is the only solution to this problem. Kortum.7 Next Steps As developing countries seek to obtain the same high quality of life enjoyed by the solutions/a-target-for-us.aei. 2013) 8. Duncan. The reduction of payroll taxes would offset the regressive impact of carbon taxes on low-income households. Border Tax Adjustments. and David A. http://www. the United States can simultaneously provide a model of decoupling growth for other countries to follow.ucsusa. Samuel Kortum. http://www. Ian Foster. Todd Munson. 2012). 2012).9 Endnotes 1. 2013). Todd Munson.” Exxon Mobil. “Unilateral Carbon Taxes. “Carbon Levels.3 Critics of a carbon tax often point to the concept of carbon leakage. “ExxonMobil’s views and principles on policies to manage long-term risks from climate change. 9 . thus enabling gains in longrun economic efficiency and growth.” Live Smart BC. 9.S.exxonmobil. Rausch.Think Change . “Hunting for Green Growth in the G20.Economics .ca/cas/pdfs/2012-Progress-to-Targets.climatechange. www. “Jobs and Competitiveness Program . 7. Groups as diverse as the Sierra Club and the American Enterprise Institute have come out in support of a carbon tax or at least discussed it. “British Columbia’s Carbon Tax Shift: The First Four Years.bc. “A Target for U. www. 3. 2013). however. “The economics of carbon taxes . 5.txt (accessed December Samuel S. a carbon tax would encourage companies and individuals to switch their investments toward clean enterprises. credibility in future global climate negotiations by showing that it is willing to take action against climate change.6 This problem can be avoided. as is currently done in Australia and the EU.8 Even Exxon Mobil has expressed support for a carbon tax compared to regulation or cap and trade. 2012). By passing a revenue-neutral carbon tax. Luckily. Ian Foster. Gita Khun Jush.

66.5 In Clarke County. GA.Affordable Housing in a Poverty-Stricken Community Kirstie Hostetter. ues and affecting the availability of affordable 35. supporting the property owner and the upkeep of rental properties and discouraging the neglect of housing. Still.985 children. Clarke County recently received $1.2 percent of households pay 30 percent or more of their income on gross rent.11 • On January 2. Census.6 percent of residents live cretionary spending took effect below the federal poverty line. leaving 23. The generCommunity Development Block ally accepted definition of affordability is for a Grants to assist with programs such as affordable housing and household to pay no more than 30 percent of poverty reduction.476 in federal funding for programs addressing issues of human development. result10 .8 Analysis Permits for expanding services like plumbing or electricity.S. Property owners look to maximize returns on off-campus housing for students attending the • Key Facts University of Georgia. Georgia should offer incentives that encourage rental property owners to offer a portion of existing rental units as affordable housing for low-income families.10 Existing affordable housing cannot support the number of low-income families.272.7 percent of people younger housing options. Property owners experiencing high rental vacancy rates could maintain a source of rent by participating in this policy even if market demand remains low.6 Only 410 units are available at a rent of less than $200 and only 643 at a rent of $200-$299.13 its annual income on housing. stable living environment. which cost $65 dollars per structure plus $2 per unit. UGA provides housing for than age 18. 2013.12 the financial resources to rent available rooms.272. In within Clarke County. driving up property val• According to the U. The resulting mixed-income housing would also provide positive educational benefits.277 munity development spending by 4 individual rooms vacant. or 7.9 would not be needed for existing structures. leaving 19. Lower-income families would provide the owners with income from units that would otherwise provide no revenue in exchange for a safe. money needed to build affordable housing communities in the future could be used now for incentives covering the difference between what a poor family can pay and the market rate.381 students.780 peoan estimated 8. affectple living below the poverty line do not have ing over 2 million Americans.476 in federal of the housing market on their own.4 percent. 34.7 leaving few affordable housing options for people with limited means.190 undergraduates1 below the federal poverty level to compete with local residents for housing.2 A rental vathat lowered housing and com3 cancy rate of 19. Instead. live 7. the 42. • Athens-Clarke County recently Poor citizens cannot fill the remaining capacity received $1. University of Georgia Clarke County.1 percent exists. a cut in disClarke County. These payments contribute to total profits.

xhtml?pid=ACS_11_3YR_B25023&prodType=table.S. “U. 5.census. “Mixed-income housing and the HOME program” accessed on January 19. amount of money conservatively invested. http://portal. the • The Great Recession caused a masdepartment has the money to establish sive increase in foreclosure rates.hud. Incentive amounts would be equal to the price of one market-rate unit for each affordable housing unit.nlchp.” a set resulting in an extreme need for affordable housing. This program building separate affordable houscould be implemented within the next two ing structures. 2013.aspx?nid=394. Georgia. 4. an “Affordable Housing Trust Fund.hud. http://www.0/en/ACS/11_5YR/DP03/ in people living in substandard conditions. University students rely on the housing market to provide affordable apartments.0/en/ACS/11_1YR/DP04/0500000US13059. GA 7.S. Many departments at the local university offer course credit for this type of service an incentives-based affordable housing • Using existing rental units elimiprogram guaranteeing rental properties nates start-up costs associated with as affordable for 30 years. http://factfinder2.Clarke County. quality housing for low-income people would not affect university GA” accessed on December 4.Clarke County. bkmk/table/ content/pubs/CHCDF%20Sequestration%20Impacts1. years. The government should hold an informational meeting for local property owners explaining the incentives programs in terms of both economic and social benefits to encourage participation. “U.Clarke County. GA” accessed on January 22. “Human & Economic Development” Athens-Clarke County Unified Government 11 . This plan outlines steps to developing ing affordable housing funding. Census Bureau Fact Finder. faces/tableservices/jsf/pages/productview. 2012.S. An incentives program would contribute to property owners’ revenue. Endnotes 1. Following recent federal grants. http://www. 3. 6. 2012. “Human & Economic Development” Athens-Clarke County Unified Government website accessed on January 22. GA 12. http://portal. Next Steps The Clarke County government should develop an incentive program similar to the • Talking Points Affordable Housing Density Bonus pro• An exponentially growing federal deficit has made politicians considvided by the American Planning Associaer budget cuts in many areas includtion.pdf. Student volunteers interested in urban planning. finance. GA” accessed on December County. Census Bureau Fact Finder. A timeline should be developed for implementation in order to hold all parties accountable for a finished policy by a certain date. “U. “UGA by the Numbers” accessed on September 27. Census Bureau Fact Finder. “Campaign for Housing and Community Development Funding” accessed on October 15. bkmk/table/1.S. “U. 2. Affordable.S. or related fields of study could volunteer to help with much of the information processing regarding affordable housing applications and property owner compensation. which would finance the incentives program. “Part III.athensclarkecounty. This affects overall home values because when people visit the county they frequently see dilapidated structures throughout the area.census. 2013. Chapter -1.Clarke County. GA 8. Code of Ordinances 10. 2012. 13. Census Bureau Fact Finder. 2012. http://www.census. http://factfinder2. 9.S.pdf.S. “U. County. Census Bureau Fact Finder. “U. Article 10” Athens-Clarke County. Census Bureau Fact Finder. benefitting both the program and the student. “U. Department of Housing and Urban Development” accessed on November 26.

000 jobs were created for every $1 billion invested in public transit infrastructure.1 In turn. take the example of a household in a low-income urban area located outside the prime job sector of a city.5 Analysis The federal government should incentivize state transportation departments to create public transit infrastructure in low-income areas through the use of federal grants.2 The gains from public transportation infrastructure have provided copious benefits for all communities. every 36.000 jobs are created for every $1 billion invested in public transit infrastructure. and 3) increased environmental health hazards. Cornell University As low-income communities continue to fall behind in accessing basic public transportation resources. the vast transit disparities between high-income and low-income areas have left low-income families with significant social and economic disadvantages. especially considering that low-income families make up the majority of public transportation users4. it was estimated that an average of 36. Currently.6 billion in private sector sales as well as $500 million in federal. In 2011. however.7 In deciding where to allocate new public transportation infrastructure. state. and local tax revenues.000 jobs created by public transit investments generated nearly $3. as more people are forced to drive carbon-emitting automobiles to work. state governments spend an estimated $1 of federal funds on public transportation for each dollar collected by local property tax revenues.10 • Public transportation has been proven to stimulate economic growth.6 it is imperative to implement federal grants that specifically target low-income public transit development. Considering that Congress pledged $105 billion to investing in public transit infrastructure for fiscal years 2013 and 2014 through the MAP-21 Act. Indeed. 2) inferior access to education.9 • Low-income commuters account for the majority of public transportation ridership. as the expansion of charter schools has exacerbated the average daily commute to school. In order to understand how the use of federal grants can increase public transportation development in low-income areas. and decrease environmental pollution. Congress must provide federal grants for public transit development in these areas to stimulate economic growth. increase educational opportunities. • 36. consider the present decisions state transportation departments must make when allocating transit resources. this is where analysts argue most public transit resources are underfunded.3 Among the disadvantages of the household are: 1) decreased travel access to the majority of job opportunities in the city. it is more economically efficient for states to pursue projects in higher12 .11 • Key Facts To demonstrate how insufficient public transit negatively affects a community.Stimulating Economic Growth in Low-Income Communities Through Federal Grants for Public Transportation Michael Lemm.

9. 2. <http:// t4america.09.apta.apta..harvard. Web.” American Public Transportation Association. Web. “Transit Equity Matters: An Equity Index and Regional Analysis of the Red Line and Two Other Proposed CTA Transit Extensions. US Department of Transportation. Web.” UIC. Web.income areas due to the larger tax revenues generated. Nathalie P.>. Heather. <http://www. if the federal government assisted state governments by providing block grants for public transportation projects in low-income areas. Ibid 8 13 .” Department of Transportation |. Ibid 4 8. In order to dissipate the current income wealth gap and help all communities recover from the recent financial crisis.pdf>.p. Ibid 2 10. “The State of the Nation’s Housing 2012. < son_2012_key_facts. states would have new incentives to supply such areas with adequate public transit resources. Dec. Tabbert.12 • Talking Points Endnotes 1. However. Donahue. 26 Oct. • Federal grants will provide states with increased incentives to serve low-income communities’ public transit>. 2009. 5.8 Next Steps With $105 billion of federal spending pledged to public transportation over the next two fiscal years. Ford Foundation. Ibid 1 12. 4. “Economic Recovery . <http://www.pdf>. N.. low-income communities and state governments can make large gains from the implementation of federal block grants. 2012. <http://www. <http://www. Web. et>. “Stranded at the Station-Transit Funding Crisis” Transportation For America. 7.” American Public Transportation Transit%20Equity%20Matters%2012.1 million housing units for low-income families. Voorhees Center for Neighborhood and Community>.uic. 2012.harvard.” Joint Center for Housing Studies at Harvard University. Ibid 4 11. federal grants for public transit development can provide a feasible short-term and long-run solution. Ibid 1 6. recent federal grants distributed to states to develop more public housing units in low-income areas through the U. In fact. Web.jchs. Kerry. “Moving Ahead for Progress in the 21st Century Act (MAP-21).. FactSheet. N. 3. Community Development Block Grant Program (CDBG) have led to the creation of nearly 5. “Public Transportation Facts. 2009.Promoting Growth. • Federal grants have been especially effective in stimulating economic development in low-income communities through the CDBG (Community Development Block Grant Program).

typically at 36 percent. because of its pervasive and persistent nature. lenders are resorting to online tactics as a form of interstate commerce. as predatory lenders increasingly rely on the Internet to solicit and exploit vulnerable borrowers seeking short-term loans. the 2008 Dodd-Frank law allowed the newly created Consumer Financial Protection Bureau (CFPB) to prohibit loans with terms of less than one month or other loans that consumers are unable to pay.3 • Key Facts Analysis Though there has not yet been a comprehensive law regarding payday lending. and 28 that openly allow payday loans. allowing them to circumvent state regulations. eight that allow payday loans but have stringent regulations. Because of the short-term nature of these loans.7 14 . Online payday lending has become an increasingly dangerous form of predatory lending and one that. Since a few states have begun to regulate storefront payday loans. a payday loan refers to a low-amount. Though the act was generally successful in limiting predatory lending to military personnel.4 • On average. There are 15 states that prohibit payday loans. exploiting consumers’ vulnerability and ignorance.1 • Online payday loans are typically tacked with Annual Percentage Rates (APRs) between 378 percent and 780 percent. Congress prohibited payday loans with interest rates higher than 36 percent to active military personnel through the bipartisan Military Lending Act.095 percent. some have reportedly risen as high as 1. Though online lenders often present themselves as compliant with state laws. borrowers often cannot meet their terms and take out more loans to make ends meet. Deriving its name from the typical two-week loan term. short-term loan transacted in stores or online. those 28 states are home to 55 percent of the American population. lenders have still managed to exploit the loopholes it contained.6 More recently. The 15 states that ban payday lending do so by capping APRs. Lenders have increasingly relied on the Internet to solicit payday loans from consumers. Online lenders are furthermore harmful because they demand personal bank account information for electronic transfers. provisions so vague that lenders have easily avoided them. These bans have successfully reduced the number of payday loans taken by consumers in those states.2 • There are currently 28 states that allow payday lending in any form. who turn to less exploitative sources of short-term loans. a borrower will take out eight payday loans of $375 per year but spend more than $520 on interest. must be eliminated altogether.5 In 2007. opening consumers up to the possibility of scams or identity theft. regulation has occurred on both the state and federal levels. Tufts University Online payday lending must be abolished. Websites and targeted e-mails often omit details like the high interest rates. and banning storefronts that offer payday loans. they strategically locate themselves in states with no regulation.Eliminating Online Payday Loans Christina Luo.

nclnet. 2.8 It is not enough for states to simply ban storefronts. Tim Mathis.consumerfed. as online lending permeates state borders. 9-14.” <http://www. 21 July 2009.pewstates.12. 19 July Jeff Coen. 2. 21. “Payday Lenders: Trapping Louisiana’s Working Families in a Cycle of Debt.MilitaryLendingAct. Strengthening the CFPB’s capacity to regulate the industry would also help to decrease online payday lending. 8. But because of payday lenders’ strong lobbying efforts.pdf>. 5. 2010. Victoria McGrane. July 2011. 6.” Consumer Federation of America. <http://www. <http:// online. • Online payday loans must be eliminated.4 billion annually trying to pay back payday loans. Jean Ann Fox. • Payday loans prey on consumers looking for a short-term loan. online lending also leaves consumers vulnerable to scams and identity theft.” The Wall Street Journal.pdf>. “The Military Lending Act Five Years Later. 4. it may be more politically viable to enact robust federal regulations instead of a formal>. <http:// www. as e-lenders evade state regulations and continue to squeeze profits from desperate consumers. <http://www. “CFA Survey of Online Payday Loan Websites. “Identity thieves use payday loans to make a quick buck.29. 7. “Fake payday loans plaguing consumers.” August 2011. pdf>.chicagotribune. “Payday Lending in America: Who Borrows.wsj.pdf>. • Talking Points Endnotes 1. <http://www.5. “Attorney General Coakley Bars Two More Payday Lenders From Operating in the Commonwealth. Massachusetts Attorney General Martha Coakley. <http://articles. Pew Charitable Trusts. which are affixed with exorbitantly high interest rates but must be paid in a short time period. <http://www. 29 May authorities say. 1. Where They Borrow. 4.” October 20.” July 2012.mass. “Lawmakers Push Payday Lender Bill.” Chicago Tribune. National Consumer League. • Because lenders demand personal Consumer Federation of America.” Louisiana Budget Project.Next Steps As it has become an increasingly lucrative industry.consumerfed. Pew Charitable>. 15 .html>.com/article/SB10000872396390444873204577537661254282498. and>. it is imperative that payday lending be prohibited. affecting 12 million borrowers who spend $7. The Pew Charitable Trusts. 3.

Arkansas has the lowest average Internet connection speed of all U.6 Those municipalities should provide broadband.3 Chattanooga went from being “a dilapidated city” to a technology hub with an “Amazon. broadband. with a population of 150.2 Some of the fastest Internet connections in the United States are in Bristol. the 88th Arkansas General Assembly impeded Arkansas municipalities from distributing broadband. voice. TN.6 percent boost to GDP while 16 .S.000 per year. a government entity that already owns an electric utility system or television signal distribution system may still provide broadband. Act 1050 prohibits a government entity from providing.000 and a median household income of just $32. and set an example for Arkansas. they would make a crucial investment in their economies. Over one third of Arkansans live in households without Internet access. Unfortunately. Internet connectivity has become essential for economic competitiveness. and Lafayette. prices remain high due to an uncompetitive. such as Jonesboro and fulfillment center.”5 However. The • 36 percent of Arkansans live withinitiative will be paid for just five years after out Internet access. Florida.000 living in about 750 square miles • Key Facts (compare to Jonesboro’s Craighead County • 40-50 percent of primary health with 100.”4 Conversely. LA.14 7 $1.Providing Broadband Internet Access via Arkansas Municipalities Jacob Porter.” with a population of 9. data. recare services could be provided cently began providing broadband and paid through broadband. VA. There are 15 municipalities in Arkansas. Nevertheless.10 Quadrupling broadband speed yields a 0. reap the benefits of being a technological hub. has a municipal broadband system that generates $600. directly or indirectly. Hendrix College Municipal utilities in Arkansas should offer broadband services to foster economic development in critical fields requiring innovative technology. oligopolistic Internet service provider (ISP) market. Chattanooga.15 it was implemented. “local exchange. Analysis If Arkansas municipalities provided broadband.8 Chanute.7 Mbps.000 and median income of $29.000). KS. Arkansas’s connectivity lags behind that of other states.3 million of the capital costs up front.3 for every 1 percent inmillion over 20 years compared to leasing crease in broadband penetration.16 connections from AT&T. Martin County.2 Mbps. that satisfy this requirement. Burgeoning industries such as 3-D printing and cloud computing would be tremendously helped by faster broadband.9 Municipal broadband also brings benefits for local economies. One benefit of municipal-provided Internet is increased revenue. or wireless telecommunication service.850 (compare to Hope’s population of 10. video.000 people in 710 square miles).1 Furthermore. where municipal governments made the investment to provide Internet service. ultimately saving $30 • Arkansas may increase employment by 0. compared to the national average of 7. states: 3. “the hub of Southwest Kansas. major health care and insurance companies and a beehive of tech start-ups that all thrive on big data and super-high-speed Internet.

Act 1050.” US Census Bureau. Robert W. “Utilities in Arkansas. State of Arkansas. Approximately 40-50 percent of primary health care delivery could be carried out through telecommunications if the speed was reasonably increased. communication.aspx> (accessed December 7. • Arkansas ISPs provide the slowest average Internet speed in the country at expensive rates.pdf> (accessed January 26. Ibid. like they do with other utilities. 6. 2012). 7. 5. 4. “Cost of Connectivity.” employment increases
0. <http://arkansasenergy. these municipalities and the Arkansas Municipal League can then lobby the state government to repeal its undue restriction on September 29. like Kansas City did with Google to create a 1 gigabit connection. Hibah> (accessed January 26. <http://quickfacts.” New America Foundation. The Economist. “US Census Quick Facts energy-in-arkansas/utilities-in-arkansas. <http:// www. et al. They could provide it themselves.census. 10. Ibid.”12 These industries will provide jobs.php?StoryID=222891> (accessed January 26. April 2012. 2012). Next Steps Arkansas municipalities. 88th General Assembly. 12. Those that currently provide electricity or television ought to take the first step in municipal broadband because they are the only ones able to do so under Act 1050. Municipal broadband will set an example for other Arkansas municipalities. 2011.13 These advantages and more are enjoyed by citizens and businesses in a small but growing number of American cities.” United States Census Bureau. • Talking Points Endnotes 1. Arkansas would also gain from broadband’s telehealth opportunities. by State: 2010.” 17 . itweb.” Institute for Local Self-Reliance.” Arkansas Economic Development Commission. Singer. “New study quantifies impact of broadband speed on GDP.also making possible innovative business models. 2012. 2012). 8. “Reported Internet Usage for Individuals 3 Years and Older. Crandall and Hal J. creating many jobs. 2. both big and small. “The Economic Impact of Broadband Investment. “Broadband at the Speed of Light. <http://www. 13. November 20. 2011.” Ericsson. • Municipalities in TN and LA have provided broadband like they provide utilities while also generating revenue and increasing the quality of Internet service. or form a progressive partnership with a private company.census. As a rural state. Their examples should be followed in Arkansas.2
0. Christopher Mitchell. July 2012. 16. 2012. June 2012. 3. stand to gain from offering broadband.” US Census Bureau. 15. Crandall et al. 14.” Institute for Local Self-Reliance.” <http://internetinnovation. 2012).” Economist Intelligence Unit. “Reported Internet Usage for Individuals 3 Years and Older. “Florida Fiber: Martin County Saves Big with Gigabit America_.” New York Times. “Superfast Britain? Myths and realities about the UK’s broadband future.3
per year. Ibid. Regular Session.xls> (accessed December 7. 2012). by State: 2010. • Businesses with fast broadband connections can participate in innovative methods of production. “The Economic Impact of Broadband Investment. it is just a matter of which communities provide them a niche in which to grow. and data collection. Thomas Friedman.11 For each “percentage
 state. “Obama’s Moment.

” is monitored by the country’s Financial Services Commission.”1 To address these issues and enable the industry to reach its full potential. “to generate measurable social and environmental impact alongside a financial return.5 Thus. the government should act as a facilitator for impact investments.5 The Mauritius iX reveals one weakness in a social stock exchange: it is difficult to convince owners to list their businesses. a stock exchange would assist these socially conscious businesses by reducing market barriers to impact investing.”3 Ultimately. • “The total size of the [impact investing] market could be as big as $500 billion within the next decade. and a lack of intermediary services have limited the growth of impact investing in the U. the agency should implement the Global Impact Investing Ratings System (GIIRS).S. Although private firms have attempted to address these problems. Georgetown University Socially driven businesses have become popular with financial investors in recent years. the government would provide missing infrastructure that would reduce transaction costs and stimulate business growth. the Global Impact Investing Network (GIIN) notes that transaction costs. These actions would stimulate both demand and supply for the stock 18 . • Key Facts Analysis The United States government should look to other countries’ models to incentivize impact investing. and a lack of intermediary services have limited the growth of impact investing and even “threaten [impact investing’s] future trajectory. The agency can work with already established nonprofit organizations to provide intermediary services and expand the list of financial products.4 The U. According to the founder of Asian Impact Investment Exchange (IIX). the Impact Exchange (or iX). In order to correct that weakness in iX. In Mauritius.”3 • Transaction costs. by creating an independent agency to regulate an impact investing stock exchange.”1The Monitor Group estimates that “the total size of the [impact investing] market could be as big as $500 billion within the next decade. However. an absence of infrastructure. For example. government should adopt this model and create an independent agency to regulate an American exchange. “a ground-breaking publicly regulated social stock exchange. usually small or medium-sized enterprises (SMEs). which assesses “the social and environmental impact of companies and funds” to help investors do their due diligence.Incentivizing Investments in Our Community Kevin Tian. This impact investing stock exchange “has been making steady progress” as it has begun to list new companies. these investments have the potential to significantly improve both the economic and social condition of American communities in the next few years.S. the government should implement tax credits for listed companies and lower capital gains taxes for impact investors. The field of impact investing presents an exciting opportunity for economic development because impact investments are made to socially conscious businesses. an absence of infrastructure. the impact investing industry faces several challenges.

this should translate into positive tangible impacts on the environment and community. and produce goods and services. Accessed December 09. The federal government should work to break down the barriers between these two parties by creating an independent agency.” Last modified August 30. 2012.” The Monitor Institute. 2. thegiin. • Impact investments have the potential to significantly improve both the economic and social condition of American communities in the next few years. “New Impact Investing Stock Exchange is Making Steady Progress. At the same time.” last accessed December 09. • Talking Points Endnotes 1. Jessica and Katherine Fulton. B Lab. 2012.monitorinstitute.” Accessed December 09.asiaiix.” Accessed January 20. “The IIX Story. Forbes. Overall.. “GIIRS: Ratings & Analytics for Impact Investing. the economy would benefit as businesses grow. http://www. this agency would accomplish a worthy goal. 19 .pdf. including analyzing other countries’ models. January 2009. 2012.forbes. Freireich. Next Steps Impact investors and socially driven businesses are already poised to shape the world in a positive manner. The Global Impact Investing Network. By regulating an American impact investing stock exchange as well as providing intermediary services based on established systems. http://www. 2012. http://www. • The Federal Government should take several steps to incentivize impact investing. 3. “Impact Investing. “Investing for Social & Environmental Impact: A Design for Catalyzing an Emerging Industry. Impact Investment Exchange 5. create jobs.

which makes up roughly 70 percent of GDP. 20 .1 give rise to the 30-year mortgage and pro• Approximately 11 million U. the Federal Reserve reported that total U. municipalities can strengthen their tax base while enhancing investment opportunities for the region.2 owners have difficulty gaining access to credit • Foreclosure-induced expansion because banks are reluctant to lend. Cornell University Through the establishment of a Bridge Loan Trust Fund (BLTF).7 A Congressional Research Service • Reductions in property tax revestudy found that between 2007 and 2009. which would provide credit to homeowners at risk of mortgage default. wealth fell by 38.4 of 45 percent.5 homeowners owe more on their mortgages than their homes are As seen in previous credit crunches. facilitated through the critical lender-borrower relationship. The model below proposes a public finance apparatus that could be used to offset foreclosures while improving regional real estate price stability: Bridge Loans. Toth. which are commonly used to fund short-term financial obligations. 63 nue from housing declines disrupt percent of households experienced a loss in municipalities’ ability to provide net worth with a median percentage decline essential services. could be used to help homeowners at risk of mortgage default.8 percent from housing declines.9 Falling home values have historically led to contractions in consumer spending. vided much needed insurance to investors. Establishing a Bridge-Loan Trust Fund (BLTF) would make temporary lines of credit available to homeowners facing economic hardship. Homeownership. The $4 million cap used here was meant to serve a town the size of Ithaca and would therefore require rescaling based on the localities’ size and discretion.10 Analysis Home values have dropped substantially since 2006. This reduction was largely attributed to a broad collapse in housing prices.3 crisis. after which the tax levy would be rolled back. homeworth. has defined • Key Facts the way Americans have lived since the 1930s.Preventing Foreclosures: Stabilizing the Regional Tax Base and Local Real Estate Markets Through Public Finance Nicholas C. • Home values plummeted 33 perDepression-era New Deal legislation helped cent from their peak in July 2006.6 In total.2 trillion dollars was lost in plausibly explain the decline of household wealth during the recent financial home values in most areas.8 Throughout the same period. This decline has been multifaceted but has largely been attributed to increased foreclosure rates and lack of access to credit. in supply of home inventories can an estimated $19.S.11 These homes end up falling into disrepair and adversely affect the neighborhood’s appeal.S. The BLTF would be funded by a temporary property tax increase until reaching a $4 million cap.

James.html. Census.S. would be eligible to receive loans. state. a total of 301 • Interest can be allocated to fund or 8. “Household final consumption expenditure. whichever is smaller.18 taxes.d.: n. 4. 14. “Tompkins County.321 annually and 15 16 ty net through public credit. Congressional Research Service. this corresponds to a tax bill of $2.0513 percent per $1.: n. tompkins-co. 15.” Accessed October 18. HOUSE PRICES.12 The town’s current tax rate is 13. 2012. N. “2010 SCF Chart.” Accessed October 20. http://www. By increasing the tax rate to 13.108 for the first year.p. 2010 U.” N. Then I increased annual tax receipts by 4.1% and multiplied by all taxable parcels to get $700. AND THE REAL ECONOMY. 2013.pdf. 6.CON. Christopher. and federal governments should also inquire about the applicability of such a program at their respective levels of government. Calculation was based on a 0.S.d. and Susan Wachter. Amir Sufi. 8.p. American Community Survey. Joe F. HOUSE PRICES.” Accessed October 18.p. 16. 18. the BLTF would tress would have a newfound safegrow at a projected $701. 2010.1%) increase in the tax rate to 20.” Research in Business and Economics Journal. N. The maximum borrowing amount would be capped at $12. Bloomberg News.treasury.pdf. Inc. Based on median property value. Tompkins County Department of 2010.: n. “Final 2012 Tax Rates. WORKING PAPER 16685 ed.p.PETC.613. 2012. & Federal Reserve.” Accessed October 18. http://www. etc.fas.075. Web. http://www. 16-20 12..000 or 6 percent of total assessed value of the home.4 percent of total owner-occupied housexisting public programs. This estimate is based on data from CoreLogic. Policymakers should support the development and implementation of a Bridge Loan Trust Fund. 2010 U. http://www. analytics and services to business and government.p. 3. 2012.58 percent. 11. 2010..17 Once fully funded.: NBER WORKING PAPER SERIES.tompkins-co. or • Talking Points • Homeowners facing financial disabout $115 per homeowner. The borrower would have five years to pay back the entire loan amount plus 2 percent interest annually Loan eligibility standards would be determined by the administrative agent. US Department of Treasury . 9.” National League of Cities (2011) Census. World Bank. 26 Jan. American Community Survey. Mian. 2005-2009.” Accessed October 18. 21 . or reduce ing 13.” University of Pennsylvania Scholarly Commons (2005) Accessed November 1. financial and property information.p. WORKING PAPER 16685 ed.825 in 2011.” Accessed October 19. Endnotes 1.S. Hoene. “The Financial Crisis Response.cgi?article=1000&context=penniur_papers. reach $3. County. Green.p.Next Steps Ithaca has approximately 5. 2. n. FORECLOSURES.” N. 16-20. “Research Brief on American Cities.worldbank. “The Financial Crisis and its Issues . N. 2012. Tompkins County Department of Assessment. the bank.. and Francesco and James Haberman. This number is based on the Case-Shiller index which tracks home values in all 20 metropolitan areas in the nation. AND THE REAL ECONOMY.pdf. Bexley.4 per $1000 of assessed value.pdf. 2005-2009. offset administrative costs. 2012. “The American Mortgage in Historical and International Context.pdf.000 of assessed value.: NBER WORKING PAPER SERIES.8% in 2007-2010 on Housing. The program would initially be a unique opportunity for investfunded by first-year tax revenues and remain ment in the region and increase solvent by annually reallocating interest from tax base stability. Mian. 2012. http://www. Wealth Fell 38. 2012. Atif.512 raised • Reducing risks associated with from compounded interest payments over market fluctuations would present five years. This report assumes a 1% annual interest rate provided by the bank.upenn. n. 10.83814 per household. Amir Sufi. James.8(4.274 taxable parcels and total tax revenues of $17. http://data. 7. which provides consumer.” Accessed October 19. Town of Ithaca Tax Rolls. Atif. and Michael Pagano.217 . http://repository. “An Analysis of the Distribution of Wealth Across Households. 2012. Adopting such a model would provide homeowners with a crucial line of credit that would otherwise be unavailable to them in private markets during periods of economic news/2012-06-11/fed-says-family-wealth-plunged-38-8-in-2007-2010-on-home-values. (% of GDP). including $92. FORECLOSURES. “Fed Says U. and Francesco Trebbi. 1989-2010. This calculation does not take into account the additional revenue realized from 2% interest charged on loans.

The state has worked very hard to develop a variety of measures to ensure the sustainability of the product for years to come. However. U. it likely that the Maine lobster industry would be forced to scale down its operations because the industry would no longer be profitable for the fishermen. the state’s largest industry. the industry was valued at over $4 billion. Due to the supply of Canadian lobster in U. Ultimately. because the cost of the Canadian • product is cheaper than that from Maine. Lobstermen know what size the product must be. • almost 80 percent of all lobster caught off the North Atlantic coast comes from Maine. • Key Facts Maine lobster decreases and the Analysis The Maine lobster industry is the most vital asset of the state economy. As more retailers purchase Canadian lobster. strengthening statewide lobster processing infrastructure and effective marketing of the product.S. the burden of success of the Maine lobster industry falls on the shoulders of the fishermen. For example. states like New Hampshire and Massachusetts have laws forbidding the sale of whole lobsters. Maine lobstermen can feed off the success of Idaho potatoes and expand their distribution by entering new markets. the word “Maine” implies that the lob22 . Maine still dominates the market. The Maine lobster industry makes up 8 percent of the state’s GDP. Canada currently has 14 more lobster processing plants than Maine. and their buoys are registered in a state database so regulators know how much product is being harvested. restaurants frequently buy the Canadian product • to save money. The economy of the state of Maine is dependent on the success of the lobster industry. which are sold across the state and in Florida. American University By structuring state policy to create a better branding initiative. the demand for price falls as well. Branding efforts have been somewhat successful in the past at informing businesses and tourists about the industry. comes from Maine. Linda Bean’s Perfect Maine has found success in branding its lobster rolls. Without the money from TAAF. Furthermore. market has greatly expanded. Following the approval of the North Atlantic Free Trade Agreement. Furthermore. these numbers do not include the effects that lobster has on tourism.S.S. In 2012. but they have no official recognition within the state government.Strengthening and Branding the Maine Lobster Industry John Tranfaglia. or approximately 8 percent of the state’s GDP. the amount of Canadian lobster entering the U. 80 percent of the lobster caught in the U. restricting locations where dealers can sell. The state has focused on promoting the quality of the product.S. Maine lobster was certified as a Trade Assistance Product under the Trade Adjustment Assistance for Farmers Act (TAAF) in 2010. Even today. markets. Despite the introduction of Canadian lobsters. Currently there are a few advocacy groups.

com/2012/06/14/business/maine-lobster-industry-told-to-brand-its-product-to-increaseprices/ (accessed December 4.” Maine news. Betts. 5. lifestyle/food/articles/2009/07/01/linda_bean_rolls_out_her_lobster_franchise/ (accessed January 24. 23 . Processing plants prepare lobster for distribution through freezing. Stephen. which demands action from the state legislature. Chellie Pingree (D-ME) successfully persuaded both Carnival Cruise Lines and Norwegian Cruise Lines to purchase Maine lobster while their vessels were in Portland harbor.” Congressional Research Service 0 (2012). 2012). federal advocacy has also had success. all about lobster economics | The Portland Press Herald / Maine Sunday Telegram. States can follow their lead to sell their products. Concurrently. 2012). it just requires the government’s support. Jessica. 2.html (accessed December 4. U. “Trade Adjustment Assistance for Farmers. While this issue is possible to address on a state level. Hall. 2013). politics and obituaries” Bangor Daily News” BDN Maine. weather & breaking news | The Portland Press Herald / Maine Sunday • Talking Points Endnotes 1. the state should establish a more aggressive branding strategy modeled after the Idaho Potato Commission (IPC). http://bangordailynews. • Idaho has shown that effective branding works. 2012). “Maine Lobster. 4. It is clear that the Canadian lobster industry is growing and lobstermen in Maine need to find a solution. Next Steps The lobster infrastructure in Maine desperately needs improvement. • Branding requires little legislative assistance. “Maine lobster industry told to brand its product to increase prices Bangor Daily News” BDN Maine.aspx (accessed December 4. Few cruise line CEOs had realized that the wholesale price of lobster had fallen below that of ground beef. http://www.html (accessed December 4. Jurenas. Maine should begin by increasing the number of processing plants in the state. while Canada has 17.” The Boston Globe. It is in the state’s best interest to be proactive on this issue in order to avoid future problems. rendering it an economically attractive alternative for their customers and driving demand from both new and returning customers with a higher quality meal offering. In the summer of 2012. Smith. Representative Pingree’s branding and advocacy demonstrates the potential for the Maine lobster industry to succeed in a global economy. http://www.” Maine news. Currently.ster is a superior product. 3. Rep. The IPC’s branding efforts have led to Idaho producing one-third of the nation’s potato crop. Lobster News. 2012).” The World’s Finest Lobster Comes from Maine. sports. “From caught to bought. Restaurants would then purchase more Maine products because their customers know about the quality of the product. Maine only has three plants.S. Maine Lobster Council. which extends shelf life by six months to a year for live lobsters. • Adverse agricultural effects from NAFTA have only been discovered recently. “Linda Bean rolls out her lobster franchise. Peter.

000 per ad spot.4 The threat of being outspent forced campaigns to waste a substantial amount of money on these overplayed ads – a trend that is likely to continue as long as mega-donors are willing to open their wallets. the Las Vegas Media Market had over 73. politicians spent a total of $6 billion on • Key Facts getting reelected – an amount equivalent to • Nearly 1 million political advertisements aired during the 2012 the state budget of Iowa. and other voter influence campaigns. the two presidential campaigns combined spent $30 per second to court voters. thereby protecting new candidates. and so forth. a 40 percent tax on ads purchased after 750 spots.8 million advertisements inundated the airwaves. such as candidates. Analysis In order to incentivize less campaign spending on advertisements. Taking into consideration the needs of smaller campaigns and new candidates as opposed to campaigns funded by mega-donors and Super PACs. This tax will make it less worthwhile to spend excessive amounts on TV advertising and will halt the escalating ad war that has become a feature of political campaigns since the Citizens United v. new methods need to be implemented to decrease the amount of campaign spending. Florida. a tax incentive to prevent excessive spending on advertising is an effective way to solve this issue. • Over $200 million of Super PAC with the majority of the trauma falling on the money came from anonymous swing states of Ohio. should implement a tax on political advertising. Since the government does not have the power to place quotas on the amount a candidate or Super PAC can spend. The high spending on ads also represents an unfair barrier for smaller campaigns and new candidates who do not yet have the fundraising infrastructure to compete against well-funded opponents. at an average rate of $1.Deterring the Influence of Money in Politics Through Taxation Adam Watkins. FEC complicated Congress’s ability to regulate the amount people can donate. In addition.S. In the first presidential election since Citizens United. the U. reducing effectiveness of the ads. and Virdonors. the tax would be progressive based on the amount of ad time purchased per cycle.0005 political advertisements during the 2012 election cycle. Nearly 1 ond to court voters. Since the ruling on Citizens United v. The tax would include any campaign for a political purpose. University of Michigan To limit the excessive amounts of campaign advertisement spending. 24 .6 The state of Nevada could place a 20 percent tax on any ads candidates and PACs purchase after 500 ad spots per month.3 Excessive advertising made it easier for many voters to tune them out. FEC ruling.1 This election dempresidential election cycle. ballot initiatives.7 onstrated an unprecedented ability for can• Both presidential campaigns didates and parties to raise and spend money spent a combined $30 per secat the expense of the public interest.9 ginia. a progressive tax on advertisements would hamper the efforts of mega-donors and Super PACs. Nevada. For example.2 Even more shocking. the government should implement a progressive tax based on the amount of ad time a campaign purchases.

October 7. 5. 2012. October 15. Ibid. Ibid. • A progressive tax on political advertisements would act as an incentive to reduce the amount campaigns spend on Political Ads Test Even a City of Excess. http:// www. Candidates get 40% Discount during the Final Stretch. November 6. • Talking Points Endnotes 1.” USA las-vegas-average-political-ad-costs-1000-candidates-get-40-discount-during-the-final-stretch/. html#axzz2D9cUrnJ3. 2012. • The ruling in Citizens United v. and local campaigns. 8. http://www. October 25. • A tax on political ads would benefit the public by reducing the amount of political ads and protecting new candidates who do not have the backing of megadonors. html?pagewanted=all&_r=2&. bringing this policy to the attention of voters and lawmakers is the most important step at the moment. State legislatures would be hampered by partisanship that would motivate each side to produce a biased piece of legislation. demonstrating the clear side effects of money in politics. November 2. “Las Vegas – Average Political Ad Costs $1. “The Cacophony of Money. “73.” Sunlight Foundation.” The New York Times. 2. “The Most Expensive Election in History by the Numbers. 3. 3. Peters. 2. 2012. Hudson. com/2012/10/08/opinion/the-cacophony-of-money.” Sunshine Review.theatlanticwire. those states would be best able to determine the optimal levels and rates to charge for political advertisements.” The Atlantic Wire. 2012. Alex.nytimes. 7. http://www. Engler. 3. 2012. FEC allowed for candidates and outside groups to spend unprecedented amounts of money. John.html.mediapost.php/Iowa_state_ budget#cite_note-0. 4. Next Steps This program would be best implemented at the state level. http://www. Ibid. 6. 9. Since certain swing states are flooded with more campaign money than others. because it will spark a conversation about the failure of the current campaign finance system and motivate policymakers to explore creative and viable alternatives. “’12 Presidential Campaign Sets Record for Political Ad Volume. Regardless. “Iowa State Budget. 25 . This system would be similar to the current presidential public finance system and would benefit the fundraising efforts of smaller campaigns. Jeremy W. There are several pathways the measure could take to get passed in a state. http://sunlightfoundation. but they are all politically difficult.” New York Times. A referendum would be fought heavily by Super PACs and other groups that benefit from the current system.Revenue from the tax would be dedicated to a public finance fund for congressional.000.

1 Plans below these thresholds remain eligible for the tax exclusion. Uninsured workers are disproportionately young. Analysis Employer spending on health insurance is exempt from taxation as income. It would also eliminate the incentive to purchase more care than is really 26 • 60 percent of Americans under the age of 65 are covered by employer-sponsored health care. in 2012.2 Under the exclusion.and middle-income people afford private health insurance policies. Future increases to the benefit should be calculated based on market and health care inflation. a new tax will be levied on health insurance plans that exceed $10. costing about $260 billion per year. Furthermore.8 trillion.500 for families. about $260 billion a year. The health care reforms that Massachusetts initiated in 2006 provide premium support to help low. new health insurance exchanges will be created and operational by 2014.Replacing the Employer Health Care Exclusion for a Fairer Healthcare Market Victor Zhao. equal to the cost of the second-lowest insurance plan in each region. Cornell University Replace the employer health care tax deduction with a premium support plan to reduce health care costs and make the market fairer and more progressive.200 for individuals and $27. higher income workers are more likely to receive insurance and generous health care benefits through their jobs. because any amount spent above the government subsidy would be taxed as personal income. employees and employers do not pay income or payroll taxes on health benefits provided by the employer. The largest tax expenditure in the current tax code is the tax exclusion for employersponsored health insurance. and low wage earners. Higher-income earners receive a larger tax benefit because they would otherwise have had to pay a larger marginal tax rate on the additional income.2 could be used to fund the new premium support system.2 • National health spending totaled $2.3 • Key Facts . would make the system more progressive. non-white. which is unfairly regressive and promotes unnecessary health care coverage. Under the Patient Protection and Affordable Care Act (PPACA) of 2010. Plans purchased through these exchanges will be eligible for tax credits that cover a portion of the cost.9 percent of the gross domestic product.5 These reforms serve as an important case study for the effects of a premium support plan. This would remove the incentive to buy higher-coverage and more expensive insurance plans.6 A premium support plan that provides a set amount of money to pay for health insurance. Furthermore.1 • 91 percent of all private health insurance sold to people younger than 65 is employment-related. less educated. The revenue gained from eliminating the tax exclusion. or 17.

com/2009/11/employer-sponsored-health-insurance/ (accessed January 24. the health insurance exchanges should make preparations for the expected increase in customers when a premium support plan is fully implemented. rather than emsupport from the health care and insurance ployer-provided health care.pdf. Forbes Magazine. http://www. 5. Measures alcosts.. it would expand consumer choice.html. Accessed October 21.” Yale Journal of Medicine and Law. Chen. http://www. Does Not Have A Debt Problem . 27 . Mark Pauly. Kaiser Family Foundation. 3. National Bureau of Economic Research.4 vide universal access to quality. “Bending the Cost Curve Through Market Based Incentives. Todd. It Has A Health Care Cost Problem. Seth. Input and • Premium support. driving down overall health insurance costs. “Tax Expenditure of the Week: Tax-Free Health Insurance. http://www. and Gail Wilensky. Henry J. 2012.” Last modified April 2006. ready enacted under the PPACA. “Massachusetts Health Care Reform Plan. During this period. allows industries is critical. • Talking Points A premium support plan represents a subvided health insurance is unfairly regressive and benefits higher-income stantial change from current policy and earners. 2012).org/bah/2010no1/w15766. http://www. such as • Health care costs are growing at news/2011/01/12/8899/tax-expenditure-of-the-week-tax-free-health-insurance/. 2012. “Employer-Sponsored Health Insurance. • The current system of employer-pro- Next Steps The first step in a transition to premium support is already under Endnotes affordable care regardless of preexisting conditions. Rachel. yalemedlaw. More expensive health insurance plans are also generally tied to higher-paying jobs. so those most affected by this plan are likely to be those who can afford better health insurance. ultimately driving down middle-income Americans. with the PPACA set to be fully implemented by 2014. 4.needed.and middle-income earners that are eligible for tax credits. In contrast to current the individual to choose which insurpolicy.S.” Last modified 2012. Accessed October 21.forbes. Center for American Progress. Finally. A two-year transition period should follow in order to prepare for a full transition to a premium support system and give policyholders time to make necessary adjustments to their insurance plans.americanprogress. must be approved by Congress. 2011. Hanlon. 6. By 2016. “Tax Breaks for Employer-Sponsored Health Insurance. will mitigate the impact on workers who currently receive generous health insurance plans from their employers. Hixon. http://www. no.nber.” New England Journal of Medicine (2012): 1-4. Accessed November 6. the tax exclusion for employer-provided health insurance should be completely eliminated and a full transition to a premium support plan should be underway. the plan ance policy to purchase and reduces would redistribute income to lower. Joseph Antos.” Last modified January 12. 2012. Accessed October 29. VI. which is unfairly regressive. offering plans to low. 1 (2009)..5 health insurance exchanges that aim to protimes the rate of GDP. 2013).allhealth. 2012.” Last modified 2010. 2.and wasted care. health insurance exchanges will be set up in each state. nejm. “The (accessed October 21. Under the PPACA. Workers would no longer have to choose the health insurance plan and defined benefits offered by their employer.


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